Sri Lankan President backs debt relief for Africa

Sri Lanka is expecting an economic growth of 2% in 2024, which is likely to further increase to 4% or 5% in 2025, says President Ranil Wickremesinghe.

The Head of State made these remarks on Wednesday while speaking during a panel discussion on the sidelines of the World Economic Forum in Davos, Switzerland.

Responding to a question pertaining to his stance on debt relief, President Wickremesinghe acknowledged that while it is evident that Sri Lanka has performed well in terms of its agreement with the International Monetary Fund (IMF), concerns still remain as to how they will repay the total amount.

“But as I mentioned, the main issue we have is, how do you repay this? Because we’ve had a Balance of Payments issue, and secondly, we have a question of budgetary issues also, revenue is not enough for the expenditure”, he said in this regard.

Speaking in the context of increasing the revenue earned by the government, however, President Wickremesinghe stated that together with the IMF, Sri Lanka is increasing revenue, and is revamping the country’s total revenue collection systems.

“We’re increasing revenue, and as growth comes in, there should be more revenue”, he assured.

The President also unveiled that plans are underway to establish a revenue authority, replacing the individual departments currently existing.

Meanwhile, Sri Lanka’s President and Minister of Finance explained that as far as it is concerned, the country’s Balance of Payments depends on the mechanisms employed to attract new investments, and how fruitful said mechanisms are.

Speaking with regards to the short term plan currently in place to improve Sri Lanka’s Balance of Payments, President Wickremesinghe revealed that tourism, agricultural modernization and renewable energy are the sectors currently being focused on with regards to attracting investments.

“We have a fair amount of solar and wind power far beyond our needs, and we are also going to sell parts of it to India”, he explained further.

Despite these efforts, however, President Wickremesinghe highlighted that there still remain pressing concerns, including ‘populism’.

“The expectations of people have to be met…and most of us are living beyond our means, if you look at in a conventional way. Then, your bond markets, and other, are, at the moment, operating on the conventional rules”, he said, questioning how both, meeting the expectations of the people, and doing so in a conventional manner, can run in tandem.

“Now how do you have these two together? If you’re going to apply the strict rules, all governments will collapse”, President Wickremesinghe warned.

Thus, he highlighted the importance of governments having an individual stance and plan in this regard, in relation to their respective countries, adding that if not, the issue is one that would pertain.

“Your government must, at the end of the day, provide the minimum facility that is expected”, he said.

Talking about Sri Lanka’s stance in this regard, President Ranil acknowledged that Sri Lanka does not have it as bad as certain other countries, such as Africa, who is currently suffering from an extensive debt crisis.

“It’s not so bad for us, we got into this problem because we took loans on non-tradable goods, no way of paying back, but all our villages today, have paved roads and better buildings in schools. At the end of it, I can still say part of it will help us for social development”, the President said in this regard.

Speaking with regards to the current crisis faced by the African countries, President Wickremesinghe highlighted that comparisons cannot be drawn between the two countries, emphasising that Africa is in dire need of the debt relief package.

“Just because we can handle it, doesn’t mean that African countries can handle it. We are for debt relief for Africa”, President Wickremesinghe emphasised.

"If you're going to apply the strict rules, all governments will collapse" - President Ranil#HRCSL #WorldEconomicForum2024 #lka #slnews #news #adaderana #srilanka #WEF2024 #WorldEconomicForum #Davos2024 pic.twitter.com/tLDlVlSmVb

— Ada Derana (@adaderana) January 17, 2024